Goldman trader trial could put back firm's purple PR patch

When Fabrice Tourre steps into a lower Manhattan courtroom on Monday, all of Goldman Sachs’s finely crafted public relations work of the past few months could count for little.

The Financial Times reports that the case – brought by the Securities and Exchange Commission against the former Goldman employee over allegations of client 'deception' – will serve as a reminder of the bank’s aggressive brand of dealmaking in the run-up to the financial crisis; and it comes as Goldman is working to present a softer image to the public.

Tourre, who infamously referred to himself in an email exchange as 'fabulous Fab . . . standing in the middle of (a system that) is about to collapse', was a key figure in the firm’s Abacus transaction. Abacus has come to be seen as a touchstone for the kind of double-dealing that critics have accused Goldman in particular of engaging in.

The bank structured Abacus, a portfolio of mortgage-related assets, and sold it to investors but did not clearly disclose that a hedge fund, run by billionaire John Paulson, was planning to bet against the deal and helped pick the bond’s underlying securities.